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Argentina’s Fën Hoteles, founded by Endeavor Entrepreneurs Patricio Fuks and Alejandro Frenkel, recently announced that it is planning an expansion across the U.S. In partnership with real estate investment firm Rosental Group, the hotel management firm will […]
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On Friday, November 8th, the 2013 Endeavor Gala brought together over 600 entrepreneurs, business leaders, Endeavor Board members and supporters to celebrate the magic of Endeavor at Cipriani 42nd Street in New York City. As Endeavor’s only annual […]
November 12th, 2013 — by adminRead more
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December 18th, 2014
Endeavor Entrepreneur Raul Polakof on how his tech firm overcame tough times, and his future growth plans
In a recent interview with the Latin American Venture Capital Association, Endeavor Entrepreneur Raul Polakof discusses the growth of his company Scanntech, how his company rode out the 2002 financial crisis in Latin America, and the importance of innovation. Scanntech is Uruguay’s leader in point of sale (POS) technology and develops and commercializes intelligent point of sale software (IPOSS) for medium to large retail companies.
Find the full LAVCA interview here.
LAVCA: What is your background and how did you come up with the idea for the company?
Polakof: After finishing University, Benny Szylkowski (currently a partner at Scanntech and head of sales) and I decided to start a business in retail technology. For years the company developed several innovative technologies, but when we were selected as Endeavor Entrepreneurs, they helped us realize that instead of inventing technologies, we should invent a solid business model. That is what we did and suddenly the company started growing and expanding.
LAVCA: Initially, Scanntech only sold cash registers, but the economic crisis in 2002 made you reevaluate your business model. Tell us a bit more about this process. What key decisions were made? Did you have mentors that helped in this process?
Polakof: Prior to 2002 we were doing pretty well exporting software to large retailers in Argentina. The Argentinean crisis started and several of our clients went bankrupt, and, either they did not pay, or they paid in “pesos” and not dollars. Then the crisis reached Uruguay, and by 2002 we were completely broke.
We had been working on a new business model and decided that it was the right time to implement it. We decided to focus on building the network of small retailers. At the same time, through Endeavor, we received invaluable advice from Rodolfo Oppenheimer and Enrique Baliño, former CEOs of McDonalds and IBM Uruguay respectively. They came to our company once a week and provided constructive criticism, which was extremely helpful.
It was a difficult time though. We couldn’t pay our employees’ salaries, and didn’t know if the company would survive, but we learned a lot. We made some big changes at that time. Instead of selling technology, we started to sell services and use our own technology as a SaaS company (the name SaaS didn’t exist at the time). Then we implemented a service where we called all of our partners once a month to check how we were doing. Today our customer satisfaction numbers are well above the industry standards. We also worked with our partners: small independent grocery stores, CPG suppliers, banks, financial institutions, cellular companies, government, etc. on ways to add value to their business and provide a better experience to their clients through this network of small independent stores (mainly bottom of the pyramid consumers), and it worked.
LAVCA: What sort of financing have you received thus far?
Polakof: We had a very successful and profitable business in Uruguay, but we needed additional funding to expand [to Argentina]. Since Uruguay is a very small country to raise the amount of money we were targeting, through Endeavor we met Austral Capital, a VC firm based in Chile. So it became an interesting mix: a Uruguayan company that raised money in Chile and was expanding in Argentina. Our first round was US$3 million, which we closed 10 months ago.
LAVCA: What is your most pressing strategic challenge right now?
Polakof: The transfer of knowledge and service culture. As we grow quickly in Argentina, continue expanding in Uruguay and start operations in Chile, our major challenge is passing know how and service culture to a rapidly expanding organization. We consider it key to our growth strategy because we build local teams and transfer the knowledge to them so they can run the business in their country so we can then focus on entering another country.
LAVCA: Are you looking for additional financing? If so, how do you plan to put your next round of financing to use?
Polakof: We’ve had a very good experience working with Austral Capital and will look to raise a second round of financing in order to expand to Brazil, where we already have grocery stores working with our systems. We will likely start actively seeking capital at some point in 2011.
LAVCA: Scanntech is already the leader in point of sales technology in Uruguay. Where do you see your company five years from now?
Polakof: We see ourselves with a greater presence in the rest of Latin America, as well as in the Asian market.
LAVCA: What advice would you give to other Latin American entrepreneurs and/or those in Uruguay specifically?
Polakof: Work hard on the business model; it is important that your company can add real value. Get a world class team, partner and set a culture with the right values. Once you have the right business strategy, it’s all about implementation and your people are to doing that successfully.
Forbes names two Endeavor Board members and one Investor Network member to its “Elite Eight” VCs to watch
Forbes and TrueBridge Capital Partners have named two Endeavor Board members and one Endeavor Investor Network member to its “Elite Eight” list of venture capitalists to watch.
The Elite Eight is a spinoff of Forbes’ and TrueBridge’s Midas List (of top venture capitalists) and highlights up-and-comers in the industry. The new list’s name takes its inspiration from the NCAA basketball tournament, in which unexpected, upstart teams often upset perennial favorites. While the Midas List utilizes a rigorous, quantitative model to identify its honorees, the Elite Eight employs a more qualitative approach, analyzing the industry at a macro level, looking closely at individual managers’ portfolios, and speaking with industry veterans.
Note: Blurbs below reprinted from Forbes.com.
General Partner, Matrix Partners; Endeavor Global Board Member
Beim focuses on Internet and software investments for Matrix, historically among Boston’s finest venture firms but which recently planted big flags in Silicon Valley and New York. Beim, who opened Matrix’s Big Apple office early last year, was discussed frequently by the Midas List panel due to his investments in Gilt Groupe (the event-based online sales company that seems to be minting money) and TheLadders.com (the leading online destination for $100K+ jobs). JBoss, a company in which Beim invested just four years after becoming a venture capitalist in 2004, sold to RedHat in 2006 for $350 million. Like most of the others in our Elite Eight, Beim is still in his 30s, but is poised to find a place on the Midas List before long.
Founding General Partner, Emergence Capital; Endeavor Global Board Member
Green is a twin married to a twin, but has managed to build an investment portfolio that is anything but identical from others in Silicon Valley. After investing on behalf of established firms USVP and Venrock for over a decade, Green caught the entrepreneurial bug himself and co-founded Emergence Capital. The firm, which was an early investor in Salesforce.com, has focused on “cloud computing” since 2003, long before it was fashionable to do so. It’s paying off. Green earned big money on SuccessFactors, which went public in late-2007, and many believe Yammer, a Facebook-for-corporations that he backed in early 2010, could be a billion-dollar business. As these lofty plans come to fruition, Green – the elder statesman of the Elite Eight at just 44 – has a great shot at being on the Midas List for years to come.
General Partner, Benchmark Capital; Endeavor Investor Network Member
Cohler is among the youngest to hit our watch list. That’s fitting, since at the age of 31, he was the youngest non-founder to crack the general partner ranks of venerable Benchmark Capital when he joined in 2008 (Kevin Harvey was slightly younger when he co-founded the firm in 1995). Cohler was part of the founding team at LinkedIn, which recently filed for an IPO, and was one of the earliest hires at Facebook, where he was vice president of product management. He was recruited to Benchmark by Midas Lister #4, Peter Fenton, to beef up the firm’s presence in Web 2.0. He seems to be doing swimmingly, having invested in Asana (started by Facebook co-founder Dustin Moskovitz) and Quora (red-hot social “knowledge market”), among others. Cohler remains a special advisor to Facebook, which undoubtedly helps his already robust deal flow.
Cohler is a member of Endeavor’s recently-launched Investor Network. Designed to extend the reach of investors focused on emerging markets, the Investor Network connects leading investors with High-Impact Entrepreneurs and partners in emerging markets through tailored treks and services. The annual membership program aims to increase entrepreneurs’ access to smart growth capital and create an active global network of investors. The Network launched in February 2011 and kicked off its first trek in April, in Brazil. The next trek, Emerging Market Venture Day, will be in Silicon Valley on June 28 as a pre-conference activity for Endeavor’s Entrepreneur Summit.
In an interview with the Latin American Venture Capital Association (LAVCA), Endeavor Entrepreneur Daniel Rosas, founder of TES America, discusses effectiveness and efficiency, challenges to starting a business in Colombia, and virtuous cycles. Founded in Bógota in 1999, TES America is the leading service provider for telecommunications in Colombia. The company designs, optimizes, and monitors wireless communications networks to provide industry-specific solutions and is branching out to other industries such as healthcare. Find the full interview here.
LAVCA: Please give us some background on TES America.
Rosas: At its core, TES America is a group of electronic and computer science engineers who create customized, industry-specific solutions and systems. Our strengths have developed by designing, optimizing, and monitoring telecommunication networks.
Today we extend our expertise to other sectors most notably Oil & Gas, Mining, Health and the Public Sector. We work with clients such as Tigo, Telefonica, Alcatel and Nokia-Semens (telecom), Petrobras and Ecopetrol (energy), Carbocol (mining) and various public entities.
We have created a “Telemedicine” division, which we are establishing as a separate business from TES America. Telemedince will allow patient diagnoses content and data to be shared through Telecommunications and human/machine software interfaces – a revolutionary tool that allows hospitals in rural areas to increase their effectiveness on patient care. Telemedicine represents a clear example of how our expertise would revolutionize the efficiency and effectiveness of operations in a new sector.
LAVCA: How did you come up with the business idea?
Rosas: The idea came after the privatization of Colombia’s telecommunications’ sector. Our business is more than just providing services and products; it is about nurturing and developing the human capital of Colombia while contributing towards the efficiency and effectiveness of strategic industries which are critical to Colombia’s growth, and that of Latin America in the international arena. Our vision is social impact and high quality job creation in a constantly evolving sector.
LAVCA: Who is your competition and what do you see as TES America’s competitive advantages?
Rosas: From a corporate perspective, we are not aware of any competitors that offer the breadth and depth of products and services. Our competitive advantage derives from four key areas:
1. R&D: TES America invests in Colombia’s most talented and trained engineers by financing the research and thesis work of young engineers throughout universities in Colombia. We also invest 20% of revenues into our own R&D staff through the training and hiring of talented engineers.
2. Neutrality: Unlike the majority of competitors, we are not tied to any OEM and therefore offer impartial and objective services regarding technology.
3. Technology expertise: TES America has developed leading expertise in telecom technology, hardware integration and software development.
4. Customization: TES America is unique in that its solutions are customizable to the specific needs given a client’s industry and area of expertise.
Our most pressing strategic challenge right now is reinforcing our organizational structure to extend our expertise to foreign markets.
LAVCA: You are currently preparing the company to fundraise in the second quarter 2011. What types of investors do you plan to approach? How much capital are you seeking?
Rosas: We are seeking USD $2M for TES America and USD $500K for Telemedicine. We hope to partner with “smart capital” investors with a long-term view that can provide financing but also a network to help facilitate new market entry. We are not looking for pure equity investors seeking attractive returns in a short time frame.
We are open to both international and domestic source of capital and plan to target these investors via our own industry and personal contacts, but also with the help of Endeavor Colombia to broaden our network.
LAVCA: How do you plan to put your next round of financing to use?
Rosas: This will depend. If we find a suitable investor for the Telemedince division, we would extend to new markets. We have analyzed the drivers of adoption for rural intra-hospital consulting (rural populations, density of physicians and per-capita healthcare expenditure) and found that the best initial targets for this practice are Colombia, Argentina, Peru and Chile. Second-tier markets would include the US and additional Latin American markets.
LAVCA: Where do you see your company five years from now?
Rosas: We strive to be a leading technology and engineering services group with integrated operations in Latin America, the USA and Asia.
LAVCA: In your opinion, what remains as one of the biggest challenges for entrepreneurs in Colombia?
Rosas: I would point to four main areas: access to financial capital (especially for service and software providers), access to human capital with knowledge and experience in international markets, a taxing regulatory environment and a lack of government incentives for SMEs.
LAVCA: What advice would you give to aspiring entrepreneurs in Colombia?
Rosas: First of all, develop knowledge in technology-related disciplines. We believe technology is the seed that generates a virtuous cycle of innovation, education, development and economic growth. Leverage these technology skills to focus on sectors specifically focused on communications and networking.
Secondly, while Tes America is neutral on background, we urge entrepreneurs to develop skills through a background that stems from a quality education, international experience, language abilities and leadership potential.
Linda Rottenberg, Endeavor Co-Founder and CEO, spoke about international venture capital yesterday at VC65, a conference celebrating the 65th anniversary of the U.S. venture capital industry. Xconomy, a news and events organization which provides business and technology news, paired up with the National Venture Capital Association and the MIT Museum to hold VC65. The event, open to the public, drew nearly 1,000 attendees including entrepreneurs, technologists, and over 500 venture capitalist guests. Linda Rottenberg has also been named an “Xconomist,” serving on the volunteer advisory board of the newly launched New York chapter of Xconomy.com.
The closing panel of VC65 featured Linda, Peter Brooke of Advent International, and Tim Draper of Draper Fisher Jurvetson. Bill Sahlman of Harvard Business School moderated the panel on the topic of global entrepreneurship and venture capital’s role in emerging markets. While discussing entrepreneurship around the world, Linda highlighted the basics behind Endeavor’s mentor capitalist model and the growing community of investors in our network — investors who are not only mentoring Endeavor Entrepreneurs but also advising burgeoning investment communities in emerging markets.
In marking the 65th birthday of venture capital, the conference looked ahead to the future of the field. Panel topics included the new Frontier of Venture, Building Biotech firms, and case studies on Kiva and Skype. In “10 Takeaways from Xconomy’s VC65,” insights about a “new entrepreneurial generation” embracing the start-up life, the potential of firms to touch lives, and increasing specialization proved most exciting to the audience.
Other featured speakers included Bob Metcalfe, who delivered the opening keynote, Henry McCance of Greylock Partners on industry best practice, Ajay Agarwal of Bain Capital Ventures, Scott Kupor of Andreessen Horowitz, Bryan Roberts of Venrock, and Terry McGuire of Polaris Venture Partners. lmerHale, Silicon Valley Bank, and the Microsoft New England Research & Development (NERD) Center sponsored the event.
From March 28-31, Marketing and Communications representatives from nine Endeavor country affiliates met in Beijing to attend the Global Entrepreneurship Week Congress, a conference organized by the Kauffman Foundation to plan the annual Global Entrepreneurship Week (GEW). Endeavor was featured for local impact on four panels, and highlighted as a global partner on the Partner panel. Endeavor Brazil won the People’s Choice Award, voted on by all Congress attendees as the partner that made the most impact through their 2010 GEW campaign.
Below, check out our new video on YouTube about Endeavor’s participation in GEW 2010!
Bain & Company, a leading global management consulting firm, has provided a pro-bono consulting team to Endeavor Global for a full three-month engagement. The team is working with senior leadership across Endeavor’s worldwide organization to validate our five-year strategy for growth and sustainability, and to identify best practices to help improve our overall operations.
Additionally, Bain is providing several short-term externs to support Endeavor’s research arm, the Center for High-Impact Entrepreneurship (C-HIE). These externs will join Bain alumni already working within the Endeavor network, including Pilar Aguilar, our new Managing Director in Mexico, and Rhett Morris, the director of C-HIE.
Recently, the global professional services firm Ernst & Young (EY) signed a three-year sponsorship agreement with Endeavor Global. Under the agreement, EY will sponsor Endeavor research on topics related to entrepreneurship in emerging markets. EY support will also extend to Endeavor’s International Selection Panels. Endeavor will become a designated supporter of, and help to identify potential nominees for, EY’s Entrepreneur of the Year program in countries where both organizations operate.
“We’re thrilled to be working with Ernst & Young,” says Endeavor Co-Founder and CEO Linda Rottenberg. “There’s an incredibly strong alignment between our two organizations’ commitments to promoting high-impact entrepreneurs throughout the world.”
Says Greg Ericksen, EY’s Global Vice Chair, Strategic Growth Markets: “We’re excited about a financial management curriculum we’re currently developing for Endeavor Entrepreneurs. It will cover assurance, tax issues and leading practice, as well as effective risk management and funding for growth. Our intent is to equip entrepreneurs with access to our resources, knowledge and technical insight to drive and accelerate their growth.”
Expressing enthusiasm for the agreement, EY Chairman and CEO Jim Turley notes, “In emerging markets, entrepreneurship plays an important role in fueling growth, adding jobs and building the middle class. Endeavor has proven itself to be highly effective at unleashing the power of the entrepreneurial spirit in these markets.” He adds: “By supporting and aligning ourselves with Endeavor, we will continue to build relationships with the leaders of tomorrow and our status as the best brand for providing advice to entrepreneurial and fast-growth private and public business.”
Ernst & Young has long been a supporter of Endeavor, including as part of our Fellows program, where senior EY executives undertake three-month on-site mentorships with Endeavor Entrepreneurs.
Last week, numerous Endeavor network members participated in ArabNet, the largest digital conference in the Middle East. Featured speakers included Peter Kellner (Co-Founder, Endeavor), Fadi Ghandour (Board Member, Endeavor Jordan and Endeavor Lebanon), Omar Koudsi (Endeavor Entrepreneur, Jeeran), and Zafer Younis (Endeavor Entrepreneur, The Online Project).
Tarek Sadi, Managing Director of recently-launched Endeavor Lebanon, also spoke at ArabNet. As highlighted in the press release, Tarek “spoke of 2010 as a milestone for early stage investing in MENA,” noting the establishing of new entrepreneurial incubators and 10 new institutional investors. He noted the presence of a stronger investor base and a multiple increase in deal volumes, and highlighted a report that venture capital and private equity in emerging markets increased by 30% in 2010.
“We’ve found that two things are required for a successful entrepreneurial ecosystem,” said Tarek. “One, the right entrepreneur. And two, deep and tailored support. The biggest barrier to entrepreneurship isn’t capital.”
Meanwhile, on a panel about entrepreneurship in emerging markets, Peter Kellner stressed the importance of entrepreneurial education in the region, and developing mechanisms for creating more Arabic online content and applications. He also advocated for regulatory reform in such areas as transaction and labor laws.
Peter Kellner (right) at ArabNet
Endeavor invited 26 High-Impact Entrepreneurs representing 14 companies from Argentina, Brazil, Chile, Colombia, Egypt, Mexico and Turkey to join the organization at our 38th International Selection Panel, which was held from March 23rd-25th in Mexico City. Endeavor now supports 580 High-Impact Entrepreneurs from 372 companies in 11 emerging market countries.
“Once again, our International Selection Panel highlighted the innovation and vibrancy of high-impact entrepreneurs in emerging markets,” said Endeavor Co-founder and CEO Linda Rottenberg. “I’m particularly inspired by the fact that despite the recent upheavals in Cairo, Endeavor Egypt and Egyptian entrepreneurs were able to attend this event. I also want to extend a special thank you to Endeavor Mexico’s Board of Directors, as well as Board Chairman Emilio Azcárraga Jean, for hosting the panel.”
The International Selection Panel is the culmination of a rigorous multi-step Search & Selection process in which top local and international business leaders interview and offer guidance to entrepreneur candidates. Endeavor’s next scheduled International Selection Panel will be held in London in May.
Entrepreneurs: Francisco Murray, Tomás Pando & Francisco Piasentini
Description: The company designs and sells alpargatas, traditional Argentine shoes, in more than 30 countries on five continents.
Caso do Construtor
Entrepreneurs: Expedito Arena & Altino Cristofoletti
Description: Tapping into the lucrative Brazilian civil construction market, Caso do Construtor provides homeowners, self-employed professionals, and small construction companies with equipment like scaffolding and concrete mixers.
Entrepreneurs: Pedro Chiamulera & Bernardo Lustosa
Description: ClearSale’s credit and fraud management solution enables e-commerce systems to identify suspicious behavior, assign a risk factor based on more than 280 variables, and reject or flag a risky order for manual review.
Entrepreneurs: Boris Kraizel, Eduardo Stekel & Ricardo Wurgaft
Description: This e-commerce website for books sells a comprehensive collection of titles by unifying Latin America’s segmented book markets through a network of local publishers.
Entrepreneur: Juan Carlos de la Llera
Description: SIRVE designs, produces, and implements devices that protect structures from damages caused by earthquakes, a technology that was tested and proved during Chile’s 2010 earthquake.
Entrepreneur: Ricardo Leyva
Description: A fast-growing agency that specializes in “experiential marketing,” Sístole has managed campaigns in 15 countries for a client list that includes Procter & Gamble and Hyundai.
Entrepreneurs: Omar El Sanhoury & Moatasem Osam
Description: In a country where roughly 75% of the population owns a cell phone but only about 6% have bank accounts, Omar and Moatasem aspire to use online and mobile payments technology, as well as a robust network of merchants, to turn cell phones into debit cards.
Entrepreneur: Amr Shady
Description: A true pioneer in the mobile value-added services (VAS) industry, Amr founded T.A. Telecom in 2000 when Egypt still had single-digit penetration. Since the onset of Egypt’s revolution, T.A. Telecom’s Content & Alerts Platform has been surging.
Entrepreneurs: Oscar Salazar & Jorge Soto
Description: CitiVox uses mobile and crowdsourcing technology to build and enhance the relationship between citizens and government, increasing civic engagement and government accountability and transparency.
Entrepreneurs: Jorge Camil, Moís Cherem & Raúl Maldonado
Description: Enova designs, builds, and operates small, cost-effective educational centers called the RIA, Red de Innovacíon y Aprendizaje, targeting populations that have slipped through Mexico’s notoriously deficient public education system in marginalized neighborhoods.
Entrepreneurs: Christian, Ernesto & Patrick Vidal Flores
Description: The Vidal Flores brothers are bringing modern, stylish furniture to the masses through an innovative business model that allows them to deliver products faster and cheaper than their competitors.
Entrepreneur: José (Pepe) Zaga Saba
Description: Using a sales model similar to Avon, over 120,000 Vicky Form salespeople — almost all women — sell Vicky Form lingerie, cosmetics, and clothes to their friends and neighbors; this model, along with provocative advertising and department store sales, has given Vicky Form nearly universal brand recognition in Mexico.
Vidrios Marte (VIMA)
Entrepreneur: Hugo Hernández Basulto
Description: VIMA’s highly technical product, Thermak®, offers an insulated glass unit alternative to traditional glass panes: when installed as skyscraper windows or refrigerator doors, it reduces energy consumption by up to 30 percent.
Entrepreneur: Aytül Erçil
Description: Serving a client list across a broad range of industries, Vistek delivers “smart” camera-based automation systems that can quickly and effectively scan various processes, and then output statistical analyses.
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